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No Excuse for Dodd, Cut the Tax Cut

February 1, 2001 -- No Excuse for Dodd Let's say a few more words about John Ashcroft's nomination before he's confirmed today.

First, I like Chris Dodd, the senior senator from Connecticut. But what the hell is he thinking? Thus far the people who have come out in support of Ashcroft have mostly had decent reasons. I don't agree with them. But there's at least been a logic.

Kent Conrad and Byron Dorgan come from an overwhelmingly Republican state (North Dakota). I wish they'd decided differently. But I can see where they're coming from.

Zell Miller clearly wants to cover his right flank by sucking up to George W. Despicable, but understandable.

Russ Feingold? Well, Russ is sort of the beloved, honorable freak of the Democratic caucus. People give him credit for campaign finance reform and other than that have no idea what to make of him.

But what the hell is Chris Dodd's excuse? Besides his car, his houses, his stock portfolio, and the rest of his possessions, he owns one more piece of personal property: a Senate seat from Connecticut! Dodd owns that seat. He inherited it from his dad!

I have to imagine that Dodd decided to vote for Ashcroft out of some sense of senatorial traditionalism and courtesy. But this ain't bingo we're playing here! A lot of senators are suffering the trials of the martyrs over this (Landrieu, Cleland, etc.). Senate Democrats are going to need to stick together in some really tough situations over the next two years. And the leadership is going to have to ask some Dems from Republican-leaning states to swallow hard and cast some very difficult votes. Why should they put themselves on the line when Dodd won't even do the right thing when it's a gimme? Dodd really has a lot of explaining to do.

Hopefully the Democrats will surpass 40 votes today. But let's pause for a moment to say what was important about stopping this nomination. This was not only about whether John Ashcroft gets to be attorney general. It was important for the Democrats to defeat this nomination in order to make clear that George W. Bush is not the same as other presidents. Simple as that.

Right-wingers will probably react to that statement as though I've made some sort of fatal admission. But there's nothing to hide. Democrats had to, and still have to, make this clear. I'll say it again -- that George W. Bush is not the same as other presidents.

This is not payback or vengeance or pettiness. It is simply reaffirming reality. And it's an important reality to reaffirm.

January 30th, 2001 -- World Economic Forum Good Morning and welcome to the first Washington Memo report from Davos,
Switzerland and the World Economic Forum.

I arrived last night and I must admit that the crisp Swiss air does add an extra charge to the heady and far-reaching discussions we're all having here. I'm planning on meeting up with Tom Friedman for lunch today and hopefully also reconnecting with some friends from the British Labour Party whom I haven't had a chance to speak with since the end of our presidential election. I'm also going to be attending a seminar on bridging the global digital divide, especially in sub-arctic regions where the expansion of the Internet will apparently be a great boon for economic development. Much talk here of course about the American economy and whether the new American administration will retreat toward isolation or return to the embrace of

Okay. Look. Fine. Whatever. I'm not in Davos, Switzerland. I'm in my DuPont Circle apartment in Washington, DC. But obviously everyone else who is anyone is in Davos. But for me -- no invite. Despite my heroic efforts exposing the Bushies' attempt to smear the out-going administration with trumped up stories of inauguration day vandalism contained in this article in Slate) I'm clearly not a big enough player to go to the international shindig in the Alps.

But who cares about that nonsense!

Look. The Dems have not had a good week. But if they're shrewd their big opportunity just opened up for them. What is it? Easy. PRESCRIPTION DRUGS. It's a three-fer. No. Make that a four-fer. 1. Good policy. 2. Outflanks Bush's rapidly growing momentum on taxes. 3. Stymies those who support privatizing Medicare and turning it over to HMOs. 4. Draws the first real political blood from the new administration.

What about Ashcroft? &%$# Ashcroft! This is the real deal. That is, if the Dems know to seize the opportunity.

January 29th, 2001 -- Market Failure Well, since I grew up in California let me say a few quick words about the crazy California energy crisis. There is a growing chorus of conservative columnists who say that the crisis isn't the result of too much deregulation, but too little. (You know who they are!) It's an argument as foolish as it is elegant.

Several California power companies face looming bankruptcy because the cost of the electricity they buy was deregulated but the prices they are allowed to sell at remained capped. So their prices skyrocketed but their revenues remained flat because they couldn't raise their rates.

Now along come the gaggle of deregulation wiseacres who say: Wait a minute.
Of course this isn't working! You can't half-way deregulate. You have to do it or not do it. Deregulate all the prices or none. If you hadn't left in the caps on utility rates, prices would have risen, the whole system would have stabilized, and these utilities wouldn't be on the brink of going under and dragging the whole state with them.

This is true, of course. But assertions can be true, and irrelevant, and even moronic all at the same time. And this one certainly qualifies.

You don't get consumers to vote for deregulation by telling them their prices will go up. You entice them by telling them their prices will go down. And thus to make sure they're not being hoodwinked voters will often require some guarantees. And thus the caps.

If rates were going to skyrocket, why do it in the first place?

Now the dereg floggers will argue that once all the magic of the market got going, incentives would kick in, new production would come on line, and prices would just fall and fall and fall.

Don't bet on it.

Lots of my lefty friends can't get the logic of markets through their skulls and refuse to see the benefits of market forces in many aspects of economic life. Phones are the key example, of course. But the applicability of market forces to all aspects of economic life is a classic bogey for high-IQ simpletons whose minds are apparently not big enough for more than one good idea.

Phones are one thing; electricity is different. Why is electricity different? More on that later.

January 26th, 2001 -- Cut the Tax Cut Sad to say it, but the Democrats seem to be losing the tactical battle to frame the tax cut debate. And there's simply no reason for it. Alan Greenspan's testimony yesterday is a setback. But it needn't have been and still needn't be a major one.

Every news story over the last month that points to support for a tax cut is chalked up as a victory for the president. Dick Gephardt says he's for a tax cut; so that's a victory for Bush. Alan Greenspan says he supports a major tax cut; so that's a victory for Bush.

But wait. Al Gore ran on a platform that supported a major tax cut. Not a megalithic one like Bush's. But one in the neighborhood of $500 billion. And for anyone who knows jack about economics, Gore's tax cut would have a greater short-to-medium term impact on the economy than Bush's since Gore's is focused on people who tend to spend the extra money rather than save it. (Whether navigating recessions is better done through monetary or fiscal policy is another matter entirely).

So the Republicans aren't the only ones supporting a tax cut. And, yes, you can find Dems who make these arguments. But that's just not how it's playing in the press. So the Dems tax cut talk is just trees falling in the forest.

Another point. As President Clinton ably demonstrated, you can never run against tax cuts per se. Never. You can make political arguments about who benefits from them. Or you can make arguments about priorities -- tax cuts versus "saving Social Security" or paying down the debt, etc. And why shouldn't that be so? All other things being equal, shouldn't we all be for everyone's taxes being as low as possible? I think we should.

But that's the point. All other things aren't equal. Too often Democrats get tangled up in abstract arguments about equity or spending qua spending. This will choke off all possibilities for activist government, etc. etc. etc. (Traditional libs will complain most about losing this tax cut debate. But they're actually most responsible for the problem.)

The conventional wisdom seems to dictate now that the public just isn't interested in major new government spending and thus -- with the debt pay-off argument receding -- the Dems have no available arguments at their disposal.

But this is foolish. With Bush arguing that Social Security and Medicare need to be reformed because baby-boomers are going to bankrupt the programs, isn't the issue money? If the programs are in such a bind why cut their potential sources of new revenue? Or let's think more immediately. How about a prescription drug benefit under Medicare? It's real popular. And, trust me, it'll cost a ton of money. So why not line up prescription drugs against tax cuts? The Dems' half a trillion dollar tax cut and a prescription drug benefit for your parents and grandparents versus Bush's cut for his wealthy campaign contributors (and, yes, our wealthy campaign contributors too). That sounds like good politics, doesn't it?

Ironically, the folks at the DLC are actually the ones doing the most to get out in front of Bush in a tactically intelligent and principled fashion. But no one seems to be listening.

Anyway, I know I'm not the only one to think of these things. But it's not getting translated politically and there's really no time to lose. This ain't rocket science; but for most Dems you'd think it was advanced Relativity Theory.

Someone call Chappaqua! I think we need the old guy back. At least to call the shots.